UPDATE 1-U.S. oil rig count steady for first this time this year -Baker Hughes

Reuters Staff

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(Recasts, adds quote)
By Scott DiSavino
May 20 (Reuters) - U.S. energy firms this week kept the
number of rigs drilling for oil unchanged for the first time
this year as crude futures trade near a seven-month high,
indicating that a near two-year slump in the rig count could be
ending as forecast by several analysts.
Drillers kept the number of rigs RIG-OL-USA-BHI at 318 in
the week to May 20, holding at the lowest level since October
2009, energy services company Baker Hughes Inc said in
its closely followed report on Friday.
Drillers added only one rig so far this year during the week
of March 18.
However, the pace of cuts has slowed.
So far this year, the cuts averaged 11 oil rigs per week for
a total of 218. In 2015, they cut on average 18 oil rigs per
week for a total of 963 for the year, the biggest annual decline
since at least 1988.
"We continue to believe that the U.S. rig count bottoms in
the second quarter, in part due to the recent stabilization in
oil prices," analysts at Simmons & Co, energy specialists at
U.S. investment bank Piper Jaffray, said in a note this week.
The rig count has slumped since hitting a peak of 1,609 in
October 2014 during the biggest rout in crude prices in a
generation.
U.S. crude futures fell from over $107 a barrel
mid-2014 to a near 13-year low around $26 in February.
But with U.S. crude futures settling over $48 a barrel much
of this week on production worries in Nigeria and Venezuela,
most analysts expect the number of rigs to stop falling soon
before edging up later this year with prices expected to rise in
coming months.
U.S. crude futures were fetching over $49 for the balance of
2016 and under $51 for calendar 2017.
U.S. investment banking advisory Evercore ISI said it
expects drilling to pick up in the next quarter based in part on
the number of drilling permits.
U.S. land permits totaled 2,099 in April, up a solid 15
percent from March, but down 33 percent year-on-year, Evercore
said.
Evercore expects to exit the second quarter with about 376
total rigs, before rising to an average of 401 rigs in the third
quarter.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)